2020 SACSS 3N POA EOY P1 Q3
REQUIRED
a. Calculate the rental income for the year ended 31 December 2019.
[1]
b. Explain the Revenue Recognition Theory as applied to this business.
[1]
c. Prepare all journal entries to account for the rental income for the year ended 31 December 2019, including the closing entry. Narrations are not required.
[6]
[TOTAL 8]
SOLUTION
Lorem ipsum dolor sit amet, consectetur adipisicing elit. Optio, neque qui velit. Magni dolorum quidem ipsam eligendi, totam, facilis laudantium cum accusamus ullam voluptatibus commodi numquam, error, est. Ea, consequatur.
a)
Rental income = $24 000 + 4800
= $28 800
b)
According to the revenue recognition theory, revenue is recognised when
goods are sold and delivered or services are performed by the business
during the accounting period.